Former high-flying developer and self-styled property investment guru Dan McEwan, the man behind the plan to turn Dunedin's former chief post office into a Hilton hotel, has been adjudged bankrupt.
Dozens of small investors in McEwan projects are millions of dollars out of pocket, as one development after another goes to mortgagee sale.
In the High Court at Auckland last week, Mr McEwan was adjudged bankrupt over a $978,000 debt.
Troubled finance company Hanover Finance told the court it was also owed $4 million.
But Mr McEwan's lawyer had earlier told the Auckland District Court his 70-year-old client, who claims his only source of income is a pension, owed more than $100 million.
Mr McEwan is due to be sentenced in the District Court tomorrow for breaching the Securities Act by offering investments without a registered prospectus or investment statement.
The maximum penalty is a $300,000 fine but given Mr McEwan is now bankrupt it is not clear what the court may do. It is understood community service could be an option.
Mr McEwan led the Investors Forum, a group which held seminars to promote a model of property investment and offered the opportunity to buy shares in developments.
Many have failed. The latest is the former Dunedin Chief Post Office, which was to be redeveloped as a Hilton hotel. South Canterbury Finance, owed $5 million, has put the property to mortgagee sale.
Mr McEwan bought it in 2006 for $7 million and sold apartments and suites in the yet-to-be-built development.
The property has a current rateable value of $5.7 million.
The large-scale redevelopment of north of Auckland spa town Waiwera has also run aground. In a letter to investors last week, Mr McEwan's son, Kelly, said the land's value had reduced 40% and was likely to go to mortgagee sale.
